Nokia phones could be barred from US in Qualcomm patent squabble

Nokia and Qualcomm have been engaged in a long-simmering dispute covering a …

Nokia has turned up the heat on its long-running patent dispute with Qualcomm, filing a countersuit in the US District Court for the Western District of Wisconsin. The patents in question cover CDMA and GSM technologies used in cellular phones, some of which Nokia has licensed in the past. Nokia is claiming in the countersuit that some of the technology in Qualcomm's portfolio actually belongs to Nokia. There's more at stake than writing large patent-licensing checks, however; if Qualcomm prevails in the dispute, Nokia's phones could disappear from US store shelves.

Since 2005, Qualcomm has filed 11 different patent infringement lawsuits against Nokia. The most recent suit, which has elicited the Nokia counterclaim, was filed in early April and alleges that Nokia's GSM/GPRS/EDGE cellular phones infringe on two patents covering the uses of speech encoders. Another Qualcomm lawsuit filed the same day in the Eastern District of Texas, Marshall Division (a.k.a., the rocket docket) accuses Nokia of infringing on two additional patents covering the downloading of digital content over a GPRS/EDGE network.

Nokia has licensed many of the disputed patents from Qualcomm in the past, but perhaps tiring of paying millions of dollars in licensing fees to the chipmaker, Nokia filed complaints with German, French, Italian, and UK regulatory authorities. Those complaints accuse Qualcomm of harming competition in the cellular phone market with excessive patent licensing fees and seek to have Qualcomm barred from enforcing its patents. But even as the complaints and lawsuits make their way through the US Courts and European regulatory authorities, Nokia continues to pay some royalties; the latest being a $20 million payment made in early April.

The stakes for Nokia are huge in this dispute. In addition to the lawsuit, Qualcomm filed a complaint with the US International Trade Commission in July 2006, accusing Nokia of selling cell phones and other devices that infringe on its patents. Qualcomm says this amounts to unfair trade practices on the part of Nokia and is asking the ITC to bar the import and sale of all infringing Nokia products.

Nokia is attempting to turn up the heat on Qualcomm, perhaps hoping to force a settlement before the ITC issues a potentially-devastating ruling later this year or in early 2008. "It's important to keep this move in context of current ITC litigation which is now a focal point of the dispute between the companies, and has serious consequences for Nokia if the ITC rules in Qualcomm's favor," Raymond Zenkich, a partner with IP consulting firm Red Chalk Group, told Ars Technica.

In the best of all possible worlds for Nokia, it will prevail in the lawsuits and the European complaints. Realistically, Nokia is hoping to write smaller checks to Qualcomm in the future, while Qualcomm wants to keep the licensing money flowing at the old levels. The stakes are high for both sides, but Nokia arguably has more to lose due to the threat of a negative ruling from the ITC.